Keywords: Credit Card, Compulsive Buying, Self-Esteem, Materialism, Impulsive Jel Codes: M31

29.11.
2016 Compulsቘve buyቘng and credቘt card mቘsuse among credቘt card holders: The roles of selfesteem, materቘalቘsm, ቘmpulsቘve buyቘng and budget constra…
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Compulsive buying and credit card misuse among credit card holders: The roles of self
esteem, materialism, impulsive buying and budget constraint L AN GU AGE
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Nor Asiah Omar, Ruzita Abdul Rahim, Che Aniza Che Wel, Syed Shah Alam
English
School of Management, Universiti Kebangsaan Malaysia, National University of Malaysia (Malaysia) Submit

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Received July, 2013 user
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OMAR, N.A.; SAINZ, M.; ABDUL RAHIM, R.; CHE WEL, C.A.; SHAH ALAM, S. (2014). Compulsive buying and credit Login
card misuse among credit card holders: The roles of selfesteem, materialism, impulsive buying and budget
constraint. Intangible Capital, 10(1): 5274. http://dx.doi.org/10.3926/ic.446 AR TIC L E TOOL S
Abstract

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Purpose: This study aims to examine the factors that influence credit card misuse among working adults in
Klang Valley, Malaysia. The relationship among selfesteem, materialism, impulsive buying, budget PR IN TED ED ITION
constraint, compulsive buying and credit card misuse are explored in this study.
Design/methodology/approach: A total of 186 questionnaires was collected via convenience sampling
from credit card users of working adults in Malaysia. A structural equation model that assesses the
relationship between the proposed variables is tested using AMOS 20.
Findings: The findings reveal that budget constraints, impulsive buying and materialism have a statistically
significant influence on compulsive buying. In terms of credit card misuse, it is influenced negatively by

selfesteem while positively by compulsive buying.
Originality/value: Despite vast research on compulsive buying and credit card misuse, very few studies
N EWS
have examined it in the nonWestern context.
Keywords: Credit card, compulsive buying, self-esteem, materialism, impulsive

buying, budget constraints, Malaysia
IN D EXIN G
Jel Codes: M31
SJR (Scopus)

1. Introduction
Credit card is a mode of payment that is widely used by consumers to purchase goods and services on credit. The
growth in credit card usage is parallel with the growth in other types of consumer credits such as bank overdrafts,
personal loans, hire purchase and others. Although credit card stimulates consumer spending (Warwick &

Mansfield, 2000) and offers flexibility to consumers, it also has its setbacks. The current developments of financial
services globally have increased the availability and usage of credit, and directly increase the indebtedness of ESCI (Thomson Reuters)
consumers (Griffiths, 2000). According to Soman (2001), those who use credit cards usually will make extra
purchases and also tend to spend over their means. Consequently, they carry large balances in their credit cards
which tend to accumulate because they usually pay only the minimum amount required by the banks.
This trend seems to be felt in Malaysia where the spread of credit card usage has been overwhelming among the
See more: Web of Science,
consumers. As reported in Passport (2011), personal credit cards in Malaysia are dominating 92 percent of
transaction volume and 89 percent of transaction value in 2010. The transaction value of credit cards increases Latindex...
from RM41,228.1 million in 2005 to RM74,783.7 million in 2010 and the number of credit cards issued increase
from 7.86 million in 2005 to 10.69 million in 2010. What is then the negative side of this development? Ahmed,
JOU R N AL C ON TEN T
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29.11.2016 Compulsቘve buyቘng and credቘt card mቘsuse among credቘt card holders: The roles of selfesteem, materቘalቘsm, ቘmpulsቘve buyቘng and budget constra…
Ishak Ismail, Sadiq Sohail, Ibrahim Tabsh and Hasbalaila Alias (2010) noted that many Malaysian consumers Search
display compulsive buying behaviour, and with the easy accessibility to credit, this behaviour has led to exorbitant
debt. The problem worsens because cardholders in Malaysia also use credit cards to withdraw cash advance. In this Search Scope
sense, credit cards are taken as the most consumerfriendly loan because it is easier to apply for credit cards than All
personal loans. Search
When credit cards were first introduced in Malaysia in the mid1970s, only the welloff individuals (professionals Browse
and successful businesspersons)are eligible to own a credit card, which then represented the symbol of prestige By Issue
(Loke, 2007). The requirement to own a credit card has been continuously relaxed as time passes. According to By Author
By Title
Ahmed et al. (2010), the rapid growing of Malaysian credit cardholders has created a thoughtless and unselective
spending by users that cause many side effects. Furthermore, many Malaysian consumers are prone to exhibit
compulsive buying behaviour. In an environment such as this, easy accessibility to credit cards has led to harmful IN FOR M ATION
circumstances such as excessive debts among Malaysians. The government of Malaysia is concerned about the
For Readers
increase in credit card usage and is keen to reduce personal debts. In 2010, the government introduces RM50 For Authors
service tax for credit cards to promote a prudential approach to control credit cards. This action has effectively For Librarians
motivated many cardholders to cancel some of their credit cards especially in the wake of the economic downturn.
Earlier in 2009, the Association of Banks in Malaysia restructured the credit card interest rates in order to
encourage consumers to pay their credit cards, promptly. VISITOR S
Recently, the Central Bank of Malaysia (more commonly known as Bank Negara Malaysia) reported that as at end
of 2010, the numbers of credit cardholders were 3.2 million with an outstanding credit card debt amounted to
RM30.8 billion. This figure was 5 percent of the total household debt while nonperforming loans (NPL) remained
low at 1.7 percent of total credit card loans and 2 percent of the total banking system NPLs. With the current
economic situation, the BNM has announced a new and more stringent set of guidelines on credit card eligibility
criteria in March 2011 to promote prudent financial management among credit card users and to encourage
responsible business practices among the credit card issuers.
Like the policy makers, the consumers are also concerned about the escalation of the credit card debt (Geisst,
2009; Gross & Souleles, 2002). Bernthal, Crockett and Rose (2005) noted that consumers use credit cards to
support their lifestyles. The increasing number of consumers especially among the young adults who incur debts in
their credit cards is worrisome, particularly because they appear to be ignorant about the future consequences of
their indebtedness (Roberts & Jones, 2001). Although previous research has investigated the factors that influence
the compulsive buying (Dittmar, 2005; Park & Burns, 2005; Gao, Wheeler & Shiv, 2009) and credit card usage
(Pirog & Roberts, 2007; Fitzmaurice, 2008), few have systematically articulated how these factors influence credit
card misuse with theoretical support. Additionally, the findings of these studies are mainly derived from Western
context. Therefore, it is unclear whether similar findings will be found in a nonWestern context. In their study,
Sidoti and Devasagayam (2010) focused on the effect of materialism and risk attitude on credit card misuse in
Western countries. Little research has been done in the Malaysian context. Palan, Morrow, Trapp and Blackburn
(2011) examine the mediating effects of credit card usage on the relationship between selfesteem and compulsive
buying behaviour. According to Hayhoe, Leach, Turner, Bruin and Lawrence (2000), income can also influence credit
card usage among college students. However, Lyons (2004) suggested that only students with needbased financial
aids are exposed to credit card debt.
Therefore, in an attempt to bridge these gaps, this study examines how selfesteem, materialism, budget
constraint and impulsive buying influence compulsive buying and credit card misuse among working adults in
Selangor, Malaysia. Moreover, this study also investigates the relationship between compulsive buying and credit
card misuse. The variables of this study have been identified based on an extensive review of literatures. The
findings of this study implicate need for training in financial planning to promote responsible spending among
Malaysian.
The remainder of the article is organized as follows. Section 2 presents the literature review, followed by the
hypotheses. Section 3 describes the research methodology, sampling technique, as well as validity and reliability
tests of the instruments used in this study. Sections 4 and 5 analyse and discuss the results. The last section
summarizes findings of this study and provides implications arising from the findings.
2. Literature Review
2.1. SelfEsteem
Selfesteem is defined as an individual’s feelings about the value or worth of himself or herself, and it is the
degree of positivity of the selfconcept (Rosenberg, 1979). Selfesteem signals individual’s interpretations of the
way others think about him or her (Cooley, 1902; Rosenberg, 1979). Pettit and Sivanathan (2011) find that
individuals with low selfesteem tend to purchase expensive luxury goods on credit to repair their selfworth. This
finding supports Bell’s (1998) argument that in a modern society, material wealth is used to demonstrate their
social power. Similarly, Eastman, Fredenberger, Campbell and Calvert (1997) posited that status is shown by
ownership of status products rather than occupational or personal reputation. These arguments are also consistent
with Prince (1993) who suggested that young adults related money closely with power and esteem. In an earlier
study, Braun and Wicklund (1989) noted that people demonstrate their identity to others by possessions of luxury
items. However, this behaviour is conditional because it prevails when their identity is threatened. In a recent
study, Gao et al. (2009) found that other psychological states such as low selfview confidence also can induce
compensatory status consumption.
If low selfesteem lead to compulsive buying (Faber & O’Guinn, 1992) or high spur to purchase (d’Astous, 1990),
how does this personality lead to credit card misuse? The answer lies in Wang, Lv and Jiang’s (2011) explanation.
When consumers’ income is insufficient to meet their demand in pursuit of prestige, they will buy the luxury
products using credit cards. The same problem less likely to occur among individuals of high selfesteem because
they are more confident and less affected emotionally. In contrast, low selfesteem people continuously experience
higher anxiety, distress and negative emotions (Yelsma, P. & Yelsma, J., 1998). Credit card misuse is more likely to
implicate this group of individual because most of the time compulsive buying happens in consumers who are very
concerned about their appearance to others and attempt to be pleasing others (Krueger, 1988).Empirically, there is
no significant relationship between selfesteem and credit card debt (Pinto, Mansfield & Parente, 2004). However,
the picture becomes clearer when the definition of debt is widened to include all kinds of borrowings. Norvilitis,
Merwin, Osberg, Roehling, Young and Kamas (2006) found a negative relationship between selfesteem and
acquisition of debt, although it cannot be verified whether low selfesteem triggers individual’s tendency to incur
more debts whether debt reduces selfesteem, or whether another third factor exists. Inspired by these ideas and
findings, we proposed the following hypotheses:
H1a. Selfesteem will have a negative effect on compulsive buying behaviour.
H2a. Selfesteem will have a negative effect on credit card misuse.
2.2. Materialism
Materialism is the individual’s devotion to material desires, drive on getting more material things, and attachment
to worldly possessions to achieve desired states. Materialists treat acquisition of goods as their personal goals that
affect their lifestyles (Richins & Dawson, 1992). Schiffman and Kanuk (2007) noted that materialism stresses
possessions as the central of an individual’s identity attribution to success. At the most extreme degree of
materialism, individuals treat possession as the greatest satisfaction and pleasures in life (Belk, 1984).
Accessibility to credit card can be detrimental to materialists because they tend to experience more dissatisfaction
for setting unrealistic goals in their lives Sirgy (1998). Credit card provides a means for them to reach these goals,
but this means is artificial because it is not supported with actual resources. Consistent with Sirgy (1998), Dittmar,
Long and Bond (2007) found that individuals who are materialistic are less satisfied and more likely to be
compulsive buyers. Therefore, the desire to attain social status through material possessions can easily trigger
temptation, causing splurge spending which probably lead to credit card misuse (Fitzmaurice, 2008; Pirog &
Roberts, 2007; Richins, 2011).
Rischins and Rudimin (1994) suggested that materialistic tendencies are related to the individual’s identity, social
behaviour, motivation for work and use of money. In turn, individuals’ attitudes toward money and credit are
related to their spending behaviour, economic wellbeing, and tolerant to debt levels (Lea, 1995). According to
Kasser and Sheldon (2000), when individuals’ needs for security and safety are not fully satisfied, they will turn
their focus on materialistic needs including purchasing expensive things to achieve the desired states. The tendency
could impose a serious problem to the economic wellbeing of the society because the increasing drive towards
materialism, which contributes to compulsive buying behaviour, has been found to also occur among the younger
consumers (Dittmar, 2005). This notion is supported by a finding by Heaney, Goldsmith and Jusoh (2005) which
shows that there is a significant relationship between status consumption and materialism among college students.
Consistent with the evidence presented by previous researchers, we therefore postulate that:
H1b. Materialism will have a positive effect on compulsive buying behaviour.
H2b. Materialism will have a positive effect on credit card misuse.
2.3. Budget Constraint
Consumer demand theory suggests that consumers maximise utility, which is subject to budget constraints, where
price and income influence the budget constraints (Pindyck & Rubinfeld, 2008). According to Hayhoe et al. (2000),
the income of college students, whether the sources are parttime jobs, sponsorships, or parents, also influence
their credit card usage. They found that students with higher income tend to purchase entertainment, clothes and
fuel with credit cards. Students with needbased financial aids are exposed to credit card debt (Lyons, 2004) but
parental income is not associated with college students with credit card debt (Wang & Xiao, 2009). These findings
suggest that students claim personal ownership on the financial aids that they are free to spend the funds
according to their own needs, interests, or desires. In contrast, they have fewer tendencies treat parental income
in a similar manner because they have to answer to their parents out of respects, gratitude or responsibility.
A recent finding by Fogel and Schneider (2011) suggests that even the high disposable income consumers are
exhibiting compulsive buying because they use it as a coping or therapeutic approach. In a case such as this,
compulsive buying may not lead to credit card misuse if the disposable income is high enough to support the
compulsive buying behaviour. Based on this, we state the following hypothesis:
H1c. Budget constraint is related to compulsive buying behaviour.
2.4. Impulsive Buying
Impulse buying happens when an individual experiences a persistent, and sudden and powerful urge to instantly
purchase something (Rook, 1987) and it could result from temporary failure of selfcontrol (Baumeister, 2002). It
happens when there is no preshopping intention to purchase the specific product or to fulfil specific buying task
(Beatty & Ferrell, 1998). The possibility of unplanned and unwanted outcomes is high when individuals act on
impulse (Rook & Fisher, 1995). However, impulse consumers tend to give in to their buying temptation although
they are aware of the negative consequences (Rook, 1987). When the impulse is out of control, the impulsive
consumers have a great tendency to misuse their credit cards because credit cards provide a readily accessible
means to fulfil their selfgenerated desires for things (Pirog & Roberts, 2007; Rook & Fisher, 1995; Roberts &
Jones, 2001).
Several studies (Fogel & Schneider, 2011; Park & Burns, 2005 have discovered significant positive relationships
between fashion orientations in both impulsive and compulsive spenders. Impulsive spending happens
spontaneously in response to instore stimulus, whereas compulsive spending is an addictive form of compensatory
consumption (Bayley & Nancarrow, 1998; Shoham & Brencic, 2003; Woodruffe, 1997). Based on the reported
research, we proposed the following hypotheses:
H1d. Impulse buying tendencies will have a positive effect on compulsive buying behaviour.
H2c. Impulse buying tendencies will have a positive effect on credit card misuse.
2.5. Compulsive Buying
Compulsive buying can be defined as a chronic, repetitive purchasing that is induced by negative events or feelings
(Faber & O’Guinn, 1989). This behaviour is a critical tendency of an individual to spend beyond his/her means and
needs (Mittal, Huppertz & Khare, 2008) and it is becoming a serious problem among consumers (Mittal et al.,
2008). Chaplin and John (2007) asserted that the modern culture that embraces materialism has intensified
compulsive buying behaviour and Roberts and Jones (2001) claimed that compulsive buying has been identifies as
one of the greatest cause associated with credit debts. People purchase expensive material goods to demonstrate
status, social power and economic power to fulfil pleasureseeking needs (Bell, 1998; Belk, 1984) and to
camouflage the low selfesteem (Faber & O’Guinn, 1992; Hanley & Wilhelm 1992). The desire to attain social status
through material possessions has encouraged the splurge spending and credit card misuse (Fitzmaurice, 2008;
Pirog & Roberts, 2007; Dittmar et al., 2007). Hence, based on previous literature, we predict the following
relationships:
H3. Compulsive buying will have a positive effect on credit card misuse.
2.6. Credit Card Misuse
Credit card misuse refers to excessive and irresponsible spending using credit card that causes credit card debt
(Norvilitis et al., 2006; Palan et al., 2011; Sidoti & Devasagayam, 2010). Consumers are more likely to misuse
their credit cards if they see money as a source of prestige (Tokunaga, 1993) and they will buy the luxury products
using credit cards in pursuit of their desires (Wang et al., 2011). Similarly, individuals with low selfesteem
purchase expensive luxury goods on credit to repair their selfworth (Pettit & Sivanathan, 2011). Credit card
misuse is also more likely among individuals who are impulsive buyers (Pirog & Roberts, 2007), students with
needbased financial aids (Lyons, 2004), and compulsive buyers (d’Astous, 1990; Faber & O’Guinn, 1992; Ritzer
1995).
2.7. Research Objectives and Research Model
The main objective of the study is to investigate if selfesteem, materialism, budget constraint and impulsive
buying are key factors that contribute to compulsive buying and credit card misuse among working adults in
Malaysia. This study also aims to examine the relationship between compulsive buying and credit card misuse. The
research model is based on past studies (Faber & O’Guinn, 1992; Calvert, 1993; Richins & Dawson, 1992; Roberts
& Jones, 2001; Rook & Fisher, 1995; Rosenberg, 1965; Urbany, Dickson & Kalapurakal, 1996; Yamuchi & Templer,
1982). This model depicted in figure 1, relates the independent and dependent variables without any intervening
variables. The model consists of four variables that we posit to have an effect on compulsive buying behaviour and
credit card misuse. The hypothesized relationships between these variables are illustrated in Figure 1.
Figure 1. Research Model
3. Research Methodology
3.1. Sampling Design and Procedures
A selfadministered questionnaire survey was distributed using convenient sampling to collect the empirical data.
The target population comprises of credit card users and those who live or work within Klang Valley, Malaysia.
Klang Valley is where the capital city of Malaysia, Kuala Lumpur, is situated. The Federal Territory of Kuala Lumpur
has the highest population density in the Malaysia i.e., about 6,500 people per square kilometre. This metropolitan
city is situated in the state of Selangor, which is one of the 14 states in Malaysia that is experiencing the fastest
rise in population density as it benefits from the rapid development of Kuala Lumpur and the spill over of residents
across the state boundary which surrounds the Federal Territory (Passport, 2011).
A total of 230 responses were collected. After data cleaning and editing, the final count of questionnaires with no
missing values for all variables under analysis was 186, representing a response rate of 81percent. Table 1
reported the demographic profiles of the respondents. There were about the same number of male and female
respondents. About 47.3 percent of the respondents were from the 2030 age group followed by 35.3percent from
the 3140 age groups, giving a total of 82 percent of total respondents. Majority of the respondents (60%) were
ethnic Malay, 30 percent were ethnic Chinese, while 10 percent were ethnic Indians and the “other” ethnic groups.
Most of the respondents held executive posts or higher. The occupations explained their income levels. Nearly half
of the respondents earned RM2,001RM4,000 per month, about a quarter earned RM4,001RM6,000 while 23.3
percent earned more than RM6,000. There were 70.7 percent of the respondents who attained a Bachelor degree,
20 percent were with a Master degree and only 1 person had a PhD qualification.
Respondents (N=186)
Demographic Variable
Number Percentage
Male 91 48.7
Sex
Female 95 51.3
Malay 112 60.0

Chinese 56 30.0
Ethnic
Indian 16 9.3
Others 1 0.7
Less than 20 years old 3 1.3
2030 88 47.3
Age 3140 66 35.3
4050 22 12.0
Above 50 years old 7 4.0
Below RM2,000 12 6.7
RM2,001 – RM4,000 83 44.7
Income RM4,001– RM6,000 48 25.3
RM6,001 – RM8,000 19 10.0
Above RM8,001 24 13.3
Students/NonExecutive 2 1.3
NonExecutive 19 10.0
Occupation Level Executive 106 57.3
Manager 48 25.3
TopManagement 11 6.0
SPM 7 4.0
STPM / Diploma 8 4.7
Education Level Degree 133 70.7
Master Degree 37 20.0
PHD 1 0.7
Notes: Students/nonexecutive correspond to respondents holding nonexecutive posts but

who are current enrol as students on a parttime basis. SPM is the high school diploma while
STPM is the posthigh school diploma.
Table 1. Demographic Profile of Respondents
Table 2 reported the patterns of the credit card usage. There were a total of 265 credit cards used, because more
than half of the respondents’ owned 2 or more credit cards. From the 265 credit cards, 44.2 percent were Master
cards, 45.3 percent were Visa cards while the remaining 10.5 percent were AMEX or Diners cards. There were 36.7
percent of the respondents who used their credit cards once a week, followed by 26.7 percent who used fortnightly,
and almost 10 percent used them on a daily basis. Only 27.3 percent of the respondents used the cards once a
month. The most popular use of credit card was shopping (52.7%), followed by groceries, business, purely
personal reason, and entertainment. The other purposes of credit card usage were convenience, payment for
insurance, medical and online ticket.
Respondents (N=186)
Credit Card Usage Variable
Number Percentage
Master 117 44.2

Visa 120 45.2
Type of Credit Card AMEX 26 9.8
Diners 2 0.8
Others 0 0
Only 1 92 49.3
Number of Credit 24 86 46.0
Card 57 6 3.3
810 2 1.3
Once a month 51 27.3
Once fortnightly 50 26.7
Usage frequencies
Once a week 68 36.7
Everyday 17 9.3
Business 42 22.7
Shopping 98 52.7
Groceries 72 38.7
Entertainment 24 13.3
Purely personal reason 29 16.0
Education 24 12.7
Others 26 14.0
Purpose of Usage 2 1.3
Convenience
3 2.0
Insurance
1 0.7
Medical 1 0.7
Online ticket 17 9.3
Petrol
Table 2. Patterns of Credit Card Usage
3.2. Operational Definitions of Variables
The Appendix exhibited measures for the six variables in this study which were either adopted or adapted from the
related studies. A survey instrument was composed based on the measurement items plus items designed to
collect respondent demographics. All questions were measured on a 5point Likert scale ranging from 1(strongly
disagree) to 5(strongly agree), where respondents indicated their degree of agreement or disagreement with a
series of statements. Table 3 reported a reliability analysis of Cronbach alphas of 0.89, 0.76, 0.85, 0.88, 0.71, and
0.81 for selfesteem, materialism, impulsive buying, budget constraint, compulsive buying, and credit card misuse,
respectively. The results indicated a high degree of internal consistency which concurs with Nunnally’s (1978) 0.7
cutoff point.
4. Data analysis
4.1. Confirmatory Factor Analysis and Structural Model
A twostep approach was employed to analyse the data, in which an examination of the measurement model was
followed by an examination of the structural model to test the hypothesized relationships (Anderson & Gerbing,
1988). The structural equation modelling (SEM) procedure enabled us to evaluate how well a proposed conceptual
model that contained observed variables and unobservable constructs fit the collected data (Bollen, 1989). A
confirmatory factor analysis (CFA) was conducted to test the robustness and reliability of the scales (via AMOS and
the maximum likelihood estimation technique) to confirm the factor loading of the six constructs and to assess the
model fit. The SEM was conducted to assess the overall fit of the proposed model and to test the hypotheses.
The model adequacy was assessed by the fit indices suggested by Hair, Black, Babin, Anderson & Tatham (2006).
The analysis showed the model had an acceptable overall fit (χ2 =339.53, df= 138, χ2/df = 2.460, p = .000, GFI
= .90, CFI = .91, RMSEA = .008). Both the GFI and CFI values were larger than the suggested cutoff point of 0.90
(Hu & Bentker, 1999) while the ratio of chisquare to degrees of freedom (χ2/df) of 2.46 indicated a good model fit
(Chin & Todd, 1995). A root mean square of error of approximation (RMSEA) of 0.008 also indicated an acceptable
fit (Hair et al., 2006). Overall, the measurement model fit well to suggest adequate validity and to warrant a closer
look.
We assessed the convergent and discriminant validity with several tests suggested by Anderson and Gerbing
(1988). Tables 3 and 4 listed the Cronbach’s alpha, composite reliabilities and variance extracted estimates (AVE).
Cronbach’s alpha of all dimensions ranged from 0.71 to 0.89, clearly indicating that the scales used in this study
were highly reliable (Nunnally, 1978). The AVE values consistently exceeded the recommended lower standard of
0.50 (Fornell & Larcker, 1981). All tests supported convergent validity of the scales. We also assessed discriminant
validity with tests recommended by Anderson and Gerbing (1988). The correlation index among factors was low to
moderate and did not exceed the 0.85 cutoff point (Kline, 2005). Given the satisfactory fit of the model, the
estimated structural coefficients were then examined to test the 7 hypothesed relationships using AMOS (see Figure
2).
Internal
Average
reliability Composite Std. Factor Std. error
Construct Item variance
cronbach reliability loading (SE)
extracted
alpha
SE1 0.89 0.89 0.73 0.844 0.071

SE2 0.878 0.066
Selfesteem
SE3 0.840 d

MT3 0.76 0.77 0.53 0.808 0.211

MT4 0.806 0.217
Materialism
MT6 0.548 d

IB1a 0.85 0.85 0.65 0.830 0.095

Impulsive
IB2a 0.821 0.101
Buying
IB3a 0.768 d
BC2 0.88 0.89 0.67 0.711 0.086

BC4 0.883 0.069
Budget
BC5 0.873 d
Constraint
BC6 0.796 0.071

CB1a 0.71 0.72 0.50 0.628 d

Compulsive CB2a 0.760 0.135
Buying CB3a 0.651 0.119

CM2a 0.81 0.81 0.59 0.696 0.098

Credit Card
CM3a 0.833 0.099
Misuse
CM4a 0.769 d
Note: d The first path for each construct was set to 1, therefore, there is no SEs.
Table 3. Factor Loadings, Reliability and Related Information
Constructs Mean a SD α CR SE MAT IB BC CB CCM
Selfesteem 4.31 0.93 0.89 0.89 0.73
Materialism 4.37 1.05 0.76 0.77 0.11 0.53
Impulsive
4.29 1.01 0.85 0.85 0.14 0.46 ** 0.65
Buying
Budget
4.42 1.18 0.88 0.89 0.19 ** 0.42 ** 0.56 ** 0.67
Constraint
Compulsive
4.37 1.03 0.71 0.72 0.20 ** 0.54 ** 0.67 ** 0.70 ** 0.50
Buying
Credit Card
4.47 1.01 0.81 0.81 0.23 * 0.45 ** 0.44 0.48 ** 0.53 ** 0.59
Misuse
Notes: Diagonals represent the average variance extracted while the other entries represent the squared
correlations. **Correlation is significant at the 0.01 level (2tailed).
a These mean figures are based on each summated scale score divided by the number of items in each scale,
for ease of interpretation; α = Cronbach’s alpha; SD = Standard deviation.
Table 4. Discriminant Validity of Constructs
4.2. Hypotheses Testing
Hypotheses 1 to 3 addressed the influence of selfesteem, materialism, impulsive buying and budget constraint on
compulsive buying and credit card misuse. The SEM performed via AMOS 20 produced t values for all standardized
factor loadings to test the hypotheses. Hypotheses 1a through 1d predicted that selfesteem, materialism,
impulsive buying and budget constraint effected compulsive buying, respectively. The results, reported in Table 5,
showed that materialism (γ = 0.25; t = 2.85; p< 0.05), impulsive buying (γ = 0.43; t = 4.57; p< 0.05) and budget
constraint (γ = 0.45; t = 5.07; p< 0.001) had significant effects on compulsive buying behaviour. Therefore, H1b,
H1c and H1d cannot be rejected. The most important variable to influence compulsive buying was budget
constraint. Meanwhile, selfesteem showed a negative, but insignificant effect on compulsive buying behaviour (γ =
0.11; t =1.732; p> 0.05).
Although selfesteem did not significantly influence compulsive buying, this variable was statistically significant (γ
= 0.23; t = 2.62; p < 0.05) in explaining credit card misuse. The strong tendency to misuse credit cards was
high among these individuals because as explained by Pettit and Sivanathan (2011), they tended to purchase
expensive luxury goods on credit to increase their sense of selfworth. While hypothesis 2a was supported, the
direct paths from materialism and impulsive buying to credit card misuse were not significant (γ = 0.25; t =1.78;
p> 0.05; γ = 0.07; t =0.37; p> 0.05, respectively), which meant that H2b and H2c were not supported.
Figure 2. Results of The Structural Model
Finally, H3, which suggested that compulsive buying behaviour influences credit card misuse, was supported (β =
0.50; t = 2.144; p< 0.05).Overall, the findings rejected the roles of materialism and impulsive buying in inducing
credit card misuse while at the same time emphasized the roles of compulsive buying and selfesteem in
influencing credit card misuse among credit card users.
Critical
Standardized
Hypothesized Path Ratio Results
Coefficient
(tvalue)
H1a Selfesteem – Compulsive buying 0.11 1.73 n.s Not supported
H1b Materialism – Compulsive buying 0.25 2.85* Supported
H1c Impulsive buying – Compulsive buying 0.43 4.57* Supported
H1d Budget constraint – Compulsive buying 0.45 5.07* Supported
H2a Selfesteem – Credit card misuse 0.23 2.62* Supported
H2b Materialism – Credit card misuse 0.25 1.78 n.s Not supported
H2c Impulsive buying – Credit card misuse 0.07 0.37 n.s Not supported
H3 Compulsive buying– Credit card misuse 0.50 2.14* Supported
* Significant at p< 0.05 (t> ± 1.96); n.s Nonsignificant
Table 5. Results of the Hypotheses Testing
5. Discussion
The findings of this study could make significant contributions to the understanding of credit card misuse among
working adults in Malaysia. First, the findings showed the credit card misuse by the working adults was directly
related to materialism, budget constraint, impulsive buying and compulsive buying. Similar to Soman (2001), this
finding suggested that Malaysian consumers had the tendency to spend beyond their means and usually make an
extra purchase when they used credit cards. Many literatures highlighted the relationship between credit and
indebtedness which explains the rise in consumer spending and debt (Griffiths, 2000). The findings were in line
with the past studies which indicated that the desire to attain social status through material possession increases
the lavish spending and credit card misuse (Fitzmaurice, 2008; Pirog & Roberts, 2007). Moreover, this study
showed that individuals with budget constrain were more exposed to credit card debt (Lyons, 2004). Furthermore,
the compulsive buying behaviour itself was one of driving factors of greatest concerns because it is associated with
credit debts (Roberts & Jones, 2001) and credit card misuse (d’Astous, 1990).
The findings also showed the compulsive buying behaviour was prevalent among working adults who had budget
constraint and impulsive buying as well as embraced materialism. Since the respondents were mostly less than 40
years old, the results were also consistent with Dittmar (2005) who found that materialism contributes to the
increase in compulsive buying behaviour especially among younger consumers. There was also a significant
positive relationship between impulsive buying and compulsive spenders (Park & Burns, 2005). This relationship
could be attributed to the composition of medium to high income group respondents in this study. As suggested by
Fogel and Schneider (2011), level of disposable income positively influences compulsive buying behaviour among
consumers.
Interestingly and consistent with the intuitive prediction, selfesteem was negatively related to credit card misuse,
which suggested that credit card users with low selfesteem were more likely to misuse their credit cards. This
finding was in line with Wang et al. (2011) who suggested that when consumers’ income is insufficient to meet
their demand in pursuit of prestige, they will resort to credit cards to purchase the luxury products.
6. Implications
The increasing number of consumers especially young adults, who incur credit card debt is worrisome particularly
if they not informed about the future consequences of their indebtedness (Roberts & Jones, 2001). Not only
consumers often use credit cards to support their modern lifestyles (Bernthal, Crockett & Rose, 2005), there are
also growing tendencies for consumers to buy compulsively (Neuner, Raab & Reisch, 2005). The results of this
study suggested significant practical implications for understanding and addressing the problem of credit card
misuse not only among working adults but also the general population. The significant positive relationship between
compulsive buying and credit card misuse indicated the need to educate the public about prudent financial planning
and responsible credit card usage. Financial management education and courses should be introduced at the
earliest age possible such as when the children begin their primary school. Moreover, parents need to take the
responsibility to inculcate financial discipline to their children in order to instil the values of living within one’s
means.
The findings of this study also indicated that budget constraint, impulsive buying, and materialism contributed most
toward compulsive buying among credit card users. In turn, low selfesteem and high compulsive buying behaviour
increased the tendency of the working adults to misuse their credit cards. These findings demonstrated the
importance of associating individual differences to effectively manage personal debts. These results implied that
consumers need to be aware of their perception of money and how that attitude transcends into their credit card
usage. They must be made understand that the purpose of credit card is for safe, economic and convenient mode
of payment, rather than as a convenient, costfree line of credits.
In Malaysia although, any individual above the age of 18 can possess a credit card (The Start Online, 2010),
issuers of credit cards should use the findings from this study to develop advertisement campaigns and marketing
strategies that promote responsible credit card usage. Socially responsible companies would benefit by designing
advertisements and marketing efforts based on rational and responsible use of credit cards. Hence credit card
companies should explain to potential credit cardholders on the interest rate, fees and the consequence of deferred
payment of holding credit cards.
7. Future Research
Based on the findings as well as the variety of issues associated with compulsive buying behaviour and credit card
misuse, further research may want to incorporate knowledge on financial literacy and credit card debt
management, particularly among those materialistic, low selfesteem, impulsive and compulsive buyers as these
groups of people prone to spend beyond their financial limits and face the financial risk. With this finding,
researchers can contribute towards improving consumer financial wellbeing and reduce bankruptcy due to credit
defaults. Another promising future research needs to be conducted with different samples of credit card users such
as, college students, senior citizens and female consumers. As various segments will have different personal traits
and values, for example, college students incline to have high proneness on possession of expensive and luxury
products (Eren, Eroglu & Hacioglue, 2012) this will help credit card companies and regulators to reduce the credit
card debt problem.
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Appendix
Research model measures
Source of
Constructs Items
Items
SelfEsteem Rosenberg 1. I feel that I have a number of good qualities.

(1965)
2. I am able to do things as well as most people.
3. I feel that I am a person of worth, at least on an equal plane
with others.
Materialism Richins & 1. I admire people who own expensive homes, cars and clothes.

Dawson (1992)
2. I like to own things that impress people.
3. I always pay attention to material objects that others own.
4. The things I own say a lot to others in terms of how my life
is.
5. I always buy what I want, not what I need.
6. Buying things gives me a lot of pleasure.
Budget Urbany et al. 1. I always have problems paying my bills every month.

Constraints (1996)
2. My budgeting is always tight.
3. I often have to spend more money than I have or can afford.
4. I always do not have enough money to spend every month.
5. I do not have any savings in my bank account for emergency.
6. I always borrow money from others to make ends meet.
Impulsive Rook & Fisher 1. I often buy things spontaneously.

Buying (1995)
2. ‘ Just do it’ describes the way I buy things.
3. I often buy things without thinking.
4. Most of the time I buy things on the spur of the moment.
5. I do not plan most of my purchases.
6. I am always reckless about what I buy.
Compulsive Faber & O’Guinn 1. I feel others will be horrified if they know of my spending
Buying (1992) habits.
2. I buy things even though I cannot afford them.
3. I feel anxious or nervous on days I do not go shopping.
4. I make only the minimum payments on my credit cards.
Source of
Constructs Items
Items
Credit Card Roberts & Jones 1. I am less concerned with the price of a product when I use a

Misuse (2001)
credit card.
2. I am more impulsive when I shop with credit cards.
3. I am always late in making payments on my credit cards.
4. I spend over my available credit limit most of the time.
5. I often take cash advances on my credit cards.
6. I often make only the minimum payment on my credit card
bills.
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29.11.

Home > Vol 10, No 1 (2014) > Omar

Keywords: Credit card, compulsive buying, self-esteem, materialism, impulsive

Malay 112 60.0

Notes: Students/non­executive correspond to respondents holding non­executive posts but

Master 117 44.2

SE1 0.89 0.89 0.73 0.844 0.071

MT3 0.76 0.77 0.53 0.808 0.211

IB1a 0.85 0.85 0.65 0.830 0.095

BC2 0.88 0.89 0.67 0.711 0.086

CB1a 0.71 0.72 0.50 0.628 d ­

CM2a 0.81 0.81 0.59 0.696 0.098

Constructs Mean a SD α CR SE MAT IB BC CB CCM

Self­esteem 4.31 0.93 0.89 0.89 0.73

Materialism 4.37 1.05 0.76 0.77 0.11 0.53

H1a Self­esteem – Compulsive buying ­0.11 ­1.73 n.s Not supported

H1b Materialism – Compulsive buying 0.25 2.85* Supported

H1c Impulsive buying – Compulsive buying 0.43 4.57* Supported

H1d Budget constraint – Compulsive buying 0.45 5.07* Supported

H2a Self­esteem – Credit card misuse ­0.23 ­2.62* Supported

H2b Materialism – Credit card misuse 0.25 1.78 n.s Not supported

H2c Impulsive buying – Credit card misuse ­0.07 ­0.37 n.s Not supported

H3 Compulsive buying– Credit card misuse 0.50 2.14* Supported

BRAUN, O.L.; WICKLUND, R.A. (1989). Psychological antecedents of conspicuous consumption. Journal of Economic

PARK, H.J.; BURNS, L.D. (2005). Fashion orientation, credit card use, and compulsive buying. Journal of Consumer

Self­Esteem Rosenberg 1. I feel that I have a number of good qualities.

Materialism Richins & 1. I admire people who own expensive homes, cars and clothes.

Budget Urbany et al. 1. I always have problems paying my bills every month.

Impulsive Rook & Fisher 1. I often buy things spontaneously.

Credit Card Roberts & Jones 1. I am less concerned with the price of a product when I use a

Intangible Capital, 2004-2016

Online ISSN: 1697-9818; Print ISSN: 2014-3214; DL: B-33375-2004

You might also like

Notes: Students/nonexecutive correspond to respondents holding nonexecutive posts but

CB1a 0.71 0.72 0.50 0.628 d

Selfesteem 4.31 0.93 0.89 0.89 0.73

H1a Selfesteem – Compulsive buying 0.11 1.73 n.s Not supported

H2a Selfesteem – Credit card misuse 0.23 2.62* Supported

H2c Impulsive buying – Credit card misuse 0.07 0.37 n.s Not supported

SelfEsteem Rosenberg 1. I feel that I have a number of good qualities.